S&P upbeat on Asia Pacific govts

Global rating agency, Standard & Poors' today said sovereign governments in Asia Pacific, including in India, are expected to continue their reforms programs in 2006, thereby improving their country's credit fundamentals.

This in turn should continue the upward rating trend for the region, said S&P in its "Asia-Pacific Sovereign Report Card".

Good global growth and still-ample liquidity conditions will underpin positive credit trends in the region. This trend should be assisted by probable robust GDP growth of 6 per cent in the region, although, there are uncertainties like sustained high oil prices, inflation, and strength of US demand, which might affect growth.

"Regional growth prospects are projected to support credit quality, with trend growth rates likely to be maintained and some upside potential in China, India, Pakistan, and Vietnam," S&P's credit analyst Ping Chew said.

"World demand, and in particular the strength of demand from China and a reviving Japan, will underpin the export sector, on which many countries depend for growth," Chew said.

Asia-Pacific sovereign ratings have improved steadily over the past few years. In the past three years alone, there were 14 upgrades but only four downgrades, while in 2005 there were four upgrades to one downgrade.